How to determine KPIs for warehouse management?

Warehousing KPIs' could be determined as a result of analyzing the internal and external situation of the company and its industry environment. Generally, KPIs of warehousing should cover the following:

1- The best use of space and arraying.

2- The implementation of safety for the goods and workers.

3- The smoothness of in and out flow of the goods.

4- The expiry date of the goods.

5- The clarity and willingness for stock counting.

6- The limits (min & max) of safety stock and stock keeping.

7- The transactions recording.

Warehousing function is a very critical within any supply chain.  If the products do not move seamlessly within supply chain business would face serious service related challenges.  Hence, it is necessary to drive the performance of the warehouse through key performance indicators.

People, Cost, Space and Systems drive the performance inside the warehouse.  Hence, generally warehouse KPIS are based on the above mentioned drivers and focused on activity in order micromanage the performance.  The following activities are common in any warehouse:

1.      Receiving;2.      Put-away;3.      Storage;4.      Pick-n-pack;5.      Shipping I will continue more deeply in each of them later on.Best Regards.

The philosophy of performance indicators is : -

Make any performance measurable 

And create competition among employees

Achieve the best use of staff and time and assets

To evaluate the success of everything

And I think these is most KPIs in the stores 

Looking for strengths and weaknesses.

The number of receiving and issuing items

Number of count and audit notes 

Inventory Turnover in the Warehouse

Employee Turnover

first you have to analysis the activities in your warehouse from point of Inbound arrival to outbound dispatched. consider all the process and define a mark up level for each activities. create a spread sheet with scores. capture the actual output and compare with mark up level. you will get the result for each process and then you can determine were improvement is needed and were your happy and were need to sustain Inbound process , putaway process, cycle count process, picking process, Checking process , consolidation process , delivery process and finally housekeeping process

people,cost, space and system drive the performance inside the warehouse.Hence, genrally warehouse KPIS are based on the aboved mentioned drivers and focused on activity in order to micromanage the performance. The following activities are common in any ware house 1. RECEIVING  2. PUT AWAY 3. STORAGE  4. PICK-N-PACK  4. SHIPING.

The most needed KPI's are

1. Safety.
2. 5s Score.
3. Good Receipt lead time ( Receiving to Putaway )
4. Pick Pack Lead time.

Track our performance against our goals

Hi, 

Warehouse Management should have following top KPI which help management to know the Health of warehouse department

1. Inventory Level -  it is be set by Management considering the risk on Supply/purchase of input  & Internal/external Lead time.

2. OTIF - On time IN ful , Tracking of Delivery against customer orders /delivery requirement

3. Inventory carrying Cost which include Manpower / space /energy cost of warehouse

4. Stock accuracy for physical inventory

5. Idea Generation to reducing Warehouse expenses.

Thanks 

Warehousing is a dynamic business which requires close monitoring. A warehouse generates huge amount of data that can be productively utilized. In today’s world, warehousing is a highly competitive business with demanding customers. Most times, the customers define KPIs as part of service agreement.

Choosing the criteria for defining the KPIs is an important process. Different industries/business models require different measurements. For example, KPIs for2PL warehouse will be different from that of a3PL warehouse; Similarly, a FG warehouse’s KPIs will be quite different from that of a RM warehouse. Hence, before defining a KPI, relevant parameters need to be measured for a specific warehouse. It is good to identify the various key processes in a warehouse and attach a KPI to the specific process. KPIs must always align with business requirements.

Major KPIs for a warehouse can include the following. But which ones to select from depends from organisation to organisation and how deep you want to analyse the warehouse operations.

1. Vehicle turnaround time: Time between the vehicle entry/GRR at gate and the vehicle exit time

2. Dock to stock time: Time taken to move the stock from the receiving area to the assigned locators (after repacking if required)

3. Cycle count physical count compliance: % of physical cycle counts completed on stipulated time (in some organisations you have to update the physical cycle count thrown by the ERP system in 48 hours)

4 Cycle count closure time: % of cycle counts closed within the stipulated time in case of discrepancy after analysis, taking necessary approvals and stock adjustment in the system (in some organisations you have to complete this activity within 30 days)

5. Gross inventory accuracy (Value): Absolute value of discrepancy is taken irrespective of whether it is a shortage or excess. Gives a measure of operations

6. Net inventory accuracy (Value): Used for financial impact of inventory discrepancy. So there will be netting of between the values of shortages (-ve) and excesses (+ve). Net inventory accuracy is always equal to or greater than gross inventory accuracy

7. Gross inventory accuracy (count): Similar to Gross inventory accuracy (value) with the difference that instead of monetary cost of discrepancy we take count qty discrepancy.

8. Net inventory accuracy (count):Similar to Net inventory accuracy (value) with the difference that instead of monetary cost of discrepancy we take count qty discrepancy.

9. On time in Full (OTIF): How warehouse team has met the demand of the customer. May be the movement of material from warehouse to assembly line or may be dispatching goods from warehouse to customers/external stakeholders as per the demand

10. PEEP (Place for every part and every part in its place) accuracy: Determines the locator accuracy. Whether the parts are stored in the assigned default locators and not anywhere else

11. Space utilisation: % of the storage space occupied with the current inventory level. Helps to plan storage for future expansion as a part of capacity planning.

12. Picking rate: No. of orders picked per minute or hour

13. Billing value: Value of the shipments made in a day

14. FIFO adherence: No.of items for which FIFO is strictly followed while picking from storage locators

 15. Material damages: Cost of the damages due to improper storage or due to improper handling of material inside the warehouse.

16. Safety: Can be again classified as accidents, near miss, near hit or safety suggestions etc.

17. Equipment uptime: To give a measure of the time consumed for breakdown, preventive maintenance and periodic maintenance of MHEs (Material handling equipments)